TMI Blog2018 (8) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... f by this consolidated order for the sake of convenience and brevity. 3. At the first instance, we will deal with the appeal in ITA No. 2073/Del/2014 for the assessment year 2009-10. Following grounds have been raised in this appeal: 1. That the Assessment Order passed in pursuance to the directions issued by the Learned Dispute Resolution Panel ('DRP') is a vitiated order as the Ld. DRP has erred both on facts and in law, in not considering the submissions made by the Appellant and in confirming the addition made by the Ld. Assessing Officer ('AO')/ Ld. Transfer Pricing Officer ('TPO') to the Appellant's income. 2. That on the facts and circumstances of the case and in law, the Ld. AO [following the directions of Learned Dispute Resolution Panel ( Ld. DRP )] erred in assessing the returned loss of the appellant of ₹ 49,664,891 at the income of ₹ 65,58,117. 3. The Ld. Transfer Pricing officer (TPO)/ Ld.DRP erred on facts and circumstances of the case and in law by confirming an Transfer Pricing adjustment amounting to INR 56,223,008 holding that the international transaction pertaining to provision of contract research a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided in justification of the arms length nature of international transactions pertaining to the payment of administration fee. 4.4 the support services are in the nature of stewardship as it result into benefit to the AEs and such coordination actuary is required to be carried out by the parent companies to improve its global presence and global profit. 5. The Ld. AO/ Ld. DRP erred in enhancing the income of the Appellant on account of interest on overdue receivables by ₹ 11,56,859 without stating any cogent reasons and basis for interest calculation. The Ld TPO grossly erred in charging interest to the receivables which were outstanding in ordinary course of business and has been collected in a reasonable period and in doing so grossly erred in law and in facts for the following reasons: 5.1 applying an arbitrary interest rate of 14.25 percent (lending rate of SBI plus 150 basis points) for calculating interest on outstanding receivables. 5.2 not considering the fact that the amount outstanding in the name of AEs represents the normal course of business activity and looking into the commercial expediency of the business, this situation prevails for b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d June 11, 2012 (Copy enclosed as Annexure 2). However, the lower authorities namely the AO / DRP / TPO, have framed / passed orders on the erstwhile entity i.e. Akzo Nobel Car Refinishes India Private Limited. The orders, thus, passed by the lower authorities are bad in law and void ab initio as the same have been passed on a non-existent entity. Further, it is respectfully submitted that the issue involved in the said additional ground of appeal also stands covered in favor of the Appellant by the jurisdictional High Court's decision in the case of Spice Entertainment Limited vs Commissioner of Service Tax (ITA 475, 476 of 2011) (Delhi), which has now been affirmed by the Hon'ble Supreme Court vide order dated November 2, 2017 in CA No. 285 of 2014. Reliance is also placed upon the following judicial precedents: * Akzo Nobel Chemicals (India) Ltd. (merged with Akzo Nobel India Limited) Vs. The Dy. Commissioner of Income Tax [ITA No.l225/PUN/2015] - Hon'ble Pune ITAT * CIT(C)-II Vs. Micra India Pvt. Ltd. [ITA 441, 444, 445, 446, 452, 461 of 2013] -Hon'ble Delhi High Court * DCIT Vs. Transcend MT Services Pvt. Ltd. [ITA No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tence. Therefore, the assessment framed is void ab initio. The ld. Counsel for the assessee furnished the sequence of events as under: S. No. Points Particulars Remarks 1. Amalgamation effective from: April 1, 2011 2. Facts of merger brought to notice of AO Yes (vide letters dated June 11, 2012, filed before AO's office on June 19, 2012) Attached as Annexure 2 along with the additional ground of appeal 3. Date of passing draft assessment order March 12, 2013 Passed in the name of erstwhile entity, i.e. Akzo obel Car Refinishes India Pvt. Ltd., without any mention of the transferee entity's name, i.e. Akzo Nobel India Limited. (refer pages 121 of appeal set) 4. Date of transferpricing order January 4, 2013 Passed in the name of erstwhile entity, i.e. Akzo Nobel Car ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gamated w.e.f. 01.04.2011 with M/s Akzo Nobel India Ltd. and this fact was brought to the knowledge of the AO by the assessee vide letter dated 11.06.2012 which was received in his office on 19.06.2012, copy of the same is placed on record as Annexure-2 annexed to the assessee s compilation. It is also noticed that the TPO passed the order dated 04.01.2013 on the erstwhile Akzo Nobel Car Refinishes India Pvt. Ltd. but ignored the aforesaid intimation furnished by the assessee before the AO on June 19, 2012. The AO passed the draft assessment order dated 12.03.2013 and the ld. DRP also issued the directions vide order dated 24.12.2013, thereafter, the AO framed the final assessment order dated 31.01.2014 in the name of erstwhile entity i.e. Akzo Nobel Car Refinishes India Ltd. without any mention of the transferee entity name i.e. Akzo Noble India Ltd. From the aforesaid narrated facts, it is clear that the assessment has been framed by the AO on an entity which was not in existence after the order dated 18.04.2012 passed by the Hon ble High Court of Karnataka at Bangalore, copy of which is placed at page nos. 2 to 37 of the assessee s compilation. 12. It is noticed that an ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for your records. We request your office to take the above record. It has further been mentioned as under: Further, in view of the aforesaid, we hereby surrender the PAN AACCG6569R issued to Genpact Bhopal and request your office to transfer all the files/records pertaining to Genpact Bhopal maintained by your office, to Circle 12(1), New Delhi and consequently, enable the office of Circle 12(1), New Delhi to issue all pending refunds due to Genpact Bhopal to Genpact India, it being the amalgamated company. We believe that our above request will be acceded to. 9. From the aforesaid letter, it is crystal clear that information was received by the AO on 03.02.2011 relating to the amalgamation of the assessee with M/s Genpact India and a reference was made by the AO u/s 92CA(1) of the Act to the TPO who vide letter dated 17.02.2012 asked the assessee to submit the document maintained in terms of Section 92D of the Act. The TPO passed the order u/s 92CA(3) of the Act on 29.01.2013. Thereafter, the AO passed the draft assessment order dated 12.03.2013 and the assessee raised the objections before the ld. DRP who issued the direction to the TPO/AO vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to a peculiar procedure of describing the original assessee as the one in existence; order also mentioned the transferee's name below that of assessee's company. Now, that did not to the assessment being completed in the name of the transferee-company. According to the sing Officer, the assesseecompany was still in existence. Clearly, this was a case where the assesssment was contrary to law, as having being completed against a nonexistent company. The Tribunal's decision is, in the circumstances, justified and warranted. 12. Similarly, the Hon'ble Jurisdictional High Court in the case of Spice Infotainment Ltd. v. CIT [IT Nos. 475 476 of 2011, dated 3-8-2011] held as under: No doubt, M/s Spice was an assessee and as an incorporated company and was in existence when it the returns in respect of two assessment years in question. However, before the case could be ted for scrutiny and assessment proceedings could be initiated, M/s Spice got amalgamated with M Corp Pvt. Ltd. It was the result of the scheme of the amalgamation filed before the Company Judge of this Court which was dully sanctioned vide orders dated 11th February, 2004. With this ama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which amalgamated with M/s Maruti Suzuki India Ltd. and this irregularity was not curable. Therefore, the assessment order passed by the AO in the name of non- existing entity was void ab initio and deserves to be quashed, we order accordingly. 14. In the present case, the contention of the Id. CIT DR was that the assessment was rightly framed by the AO on the assessee who filed the return of income and when the income was earned, it was inexistence. This controversy has been settled by the Hon'ble Jurisdictional High Court in the case of CIT v. Dimension Apparels (P.) Ltd. [2015] 370 ITR 288/[2014] 52 taxmann.com 356 (Delhi) wherein it has been held as under: Section 170(2) of the Income-tax Act, 1961, makes it clear that in the case of amalgamation, the assessment must be made on the successor (i.e., the amalgamated company). Section 176 which contains provisions pertaining to a discontinuation of business, does not apply to a case of amalgamation. The language of section 159 evidently only applies to natural persons and cannot be extended through a legal fiction, to the dissolution of companies. Once it is found that assessment is framed in the name of non-exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once it was found that the assessment was framed in the name of a non-existent entity, it did not remain a procedural irregularity of the nature which could be cured by invoking the provisions of section 292-B. The legal position having been made abundantly clear, there is no hesitation in holding that impugned order passed by Tribunal does not require any interference The appeal is accordingly dismissed. 12. Recently the Hon ble Apex Court dismissed the SLP moved by the Department in the case of M/s Spice Enfotainment Ltd. which has been followed in the aforesaid referred case of M/s Maruti Suzuki Pvt. Ltd. vs. DCIT, vide order dated 2nd November, 2017. 13. In the present case also, as we have already pointed out that the assessment was framed by the AO on the nonexistent amalgamated company, not on the amalgamating company, therefore, the assessment framed was void ab initio and the same was rightly quashed by the ld. CIT(A). Since, we have quashed the assessment framed by the AO therefore no separate finding is being given on the other issues raised in the Departmental appeal. 14. Before parting, it is relevant to point out that in the order relied by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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